US SEC charges Pakistani man over bogus Integrated Device bid
NEW YORK: A Pakistani man has been charged with fraud by the US Securities and Exchange Commission for illegally trading Integrated Device Technology Inc (IDTI.O) stock options after submitting a bogus takeover bid for the chipmaker.
The regulator on Tuesday also said it won a court order freezing the roughly $425,000 of profit made by Nauman Aly, 32, after the fake bid was traced to a computer in Pakistan.
Aly could not immediately be located for comment, and it is unclear whether he has hired a lawyer.
Integrated Device shares soared more than 23 percent on April 12 after an SEC filing falsely said that Aly and six Chinese investors had acquired 5.1 percent of its stock and offered to buy the whole company for $4.3 billion, a nearly 65 percent premium.
Most of the gains evaporated after Integrated Device's chief executive said the San Jose, California-based company had not talked with the investor group, and could not vouch that its offer was credible.
The SEC said Aly had paid $18,500 for Integrated Device call options, a bet the stock price would rise, at 11:50 a.m. that morning, and sold them at a profit at 12:18 pm, which was 10 minutes after the filing became public.
"Market manipulation doesn't pay, no matter the method or how distant the perpetrator," SEC enforcement chief Andrew Ceresney said in a statement.
The alleged fake filing was the latest in a series submitted to the SEC's Edgar system that caused stock price volatility.
In March, US prosecutors announced the arrest of and criminal charges against Nedko Nedev, a US-Bulgarian citizen they called the architect of bogus takeover bids for Avon Products Inc (AVP.N) and Rocky Mountain Chocolate Factory Inc (RMCF.O).
According to the SEC, Aly gained access to file documents with Edgar after submitting applications under his own name and an alleged Edgar filing agent called "Edgar Solutions."
The case is SEC v Aly, US District Court, Southern District of New York, No. 16-03853.